Carnarvon Disappointed By Buffalo Well Results

Australia’s Carnarvon Energy will be abandoning the Buffalo-1 drilled offshore Timor-Leste because of disappointing results.

The Buffalo-10 well was drilled offshore Timor-Leste in the TL-SO-T 19-14 license. Carnarvon holds a 50 percent interest while Advance Energy holds the remaining 50 percent. The well was spud in late December 2021 by the Valaris JU-107 jack-up rig.

Carnarvon said that the wireline logging operations were completed with the oil column deemed to be residual and uncommercial. The well will be left in a safe condition and the rig demobilized.

“The results from Buffalo-10 well are disappointing for the Carnarvon team and shareholders, but now our attention moves to the commencement of the high impact Pavo-1 and Apus-1 exploration wells within the next month in the Bedout basin,” Carnarvon Energy Managing Director and CEO, Adrian Cook, said.

"The results of B-10 are both disappointing and hugely surprising given the independently verified risk assessment which confirmed a highly likely commercial outcome from the well. Across the JV, we invested a significant amount of technical work into the project which underpinned our high degree of confidence that the well would unlock the significant value of the field,” Leslie Peterkin, CEO of Advance Energy, added.

Advanced Energy claimed that post-well evaluation indicates that the well was drilled into the hanging wall of a fault, although uncertainty in seismic resolution also contributed to the reservoir being significantly deeper than expected at this location.

The Buffalo joint venture will conduct further technical analysis in the coming weeks to fully understand why the attic was not encountered as prognosed at the drilled location.

“We believe it is likely that the JV will relinquish the Buffalo asset as neither company wishes to fund a second appraisal well in the field,” Peterkin stated.

“Looking ahead, Advance Energy remains funded for the immediate near-term and the team has been working on a pipeline of identified, attractive opportunities. We will now turn our full attention to bringing at least one of these to fruition this year,” he said.

These are value accretive opportunities and include an opportunity with cash flow, which would be suitable for debt or vendor financing. Our immediate priority will be to significantly reduce costs while we assess the next steps for the growth of the company," Peterkin concluded.

To remind, Carnarvon requested a trading halt of its shares pending news on the results of its operated Buffalo-10 well.

Now, Carnarvon is preparing for two wells are located near the Dorado field offshore Australia where the company is Santos’ partner in the project. The Noble Tom Prosser jack-up drilling rig was hired for the drilling in March 2021.

Drilling was supposed to start the drilling program in late 2021. The drilling was delayed near the end of last year and is scheduled to start in January 2022.